NEW YORK (Bloomberg) — The dollar climbed to a 13-month high against the yen this week and the strongest since November versus the euro as signs the US economy is quickening cooled speculation the Federal Reserve will lower interest rates.Traders bought the US currency after US retail sales gained and the trade deficit shrank to the smallest since 2005. The dollar also advanced after Fed officials signaled inflation remains a threat and growth will pick up.

“The US economy is still in pretty good shape, which casts doubt on a rate cut,” said Boris Schlossberg, senior currency strategist at Forex Capital Markets LLC in New York. It “points to further dollar strength.”

The dollar rose 1.4 percent this week to 120.32 yen, and reached 120.74 yen, the strongest since December 2005. It advanced 0.6 percent to $1.2923 per euro, and touched $1.2868 yesterday, the strongest since Nov. 24.

The US currency has rebounded to the range it held from April 27 through November 24, of $1.2405 per euro to $1.2979 per euro. The euro has fallen from a 20-month high of $1.3368 last month.

The British pound surged 2.2 percent against the euro this week, the most in 19 months, after the Bank of England unexpectedly raised its benchmark rate to a five-year high of 5.25 percent. None of the 52 economists Bloomberg surveyed had forecast a rate boost.

The Fed has left its benchmark unchanged since lifting it to 5.25 percent in June, after two years of rate boosts. The Bank of Japan’s key rate is 0.25 percent after a quarter-percentage-point increase in July, the first in almost six years. The European Central Bank kept its target at 3.5 percent this week after lifting it six times in the past 13 months.

Interest-rate futures show traders see a 6 percent chance the Fed will cut its target overnight lending rate between banks in March, down from a 100 percent likelihood seen last month. The Fed next sets rates on January 31.

“It’s very much building to this view that the cyclical baton will pass back to the US and that will be very dollar bullish,” said Steven Saywell, chief currency strategist at Citigroup Inc. in London.

The yield premium on US 10-year Treasuries over comparable-maturity Japanese government debt widened to 3.04 percentage points yesterday, the highest since December 25. A widening gap boosts the appeal of dollar-denominated assets.

US retail sales rose 0.9 percent in December, from 0.6 percent in November, the Commerce Department said yesterday. The median forecast of economists polled by Bloomberg News was for an increase of 0.7 percent. Spending by consumers accounts for about two-thirds of the US economy.

The trade gap, the amount by which imports exceed exports, fell to $58.2 billion in November, the smallest since July 2005, from $58.8 billion in October, the government said this week.